State personal income declined an average 1.2 percent in the first quarter of 2013 after growing 2.7 percent in the fourth quarter of 2012. Personal income declines ranged from 0.1 percent in Iowa to 2.5 percent in Wyoming. In contrast, personal income grew 1.6 percent in South Dakota, the only state with an increase in the first quarter. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 0.2 percent in the first quarter from 0.4 percent in the fourth quarter of 2012.

Personal income increased 0.5 percent in May after increasing 0.1 percent in April. Wages and salaries, the largest component of personal income, increased 0.3 percent in May after increasing 0.1 percent in April. Services industries’ payrolls accelerated. Good industries’ payrolls turned up.

PCE prices increased 0.1 percent in May after decreasing 0.3 percent in April. Excluding food and energy, PCE prices increased 0.1 percent in May after remaining flat in April.Personal saving rate
Personal saving as a percent of DPI was 3.2 percent in May, compared with 3.0 percent in April.

Real gross domestic product (GDP) increased 1.8 percent in the first quarter of 2013 after increasing 0.4 percent in the fourth quarter of 2012, according to the third estimate released by the Bureau of Economic Analysis. The first quarter growth rate was revised down 0.6 percentage point from the second estimate released in May.

GDP highlights
Inventory investment turned up notably, more than accounting for the acceleration in first quarter GDP; the manufacturing and farm industries were the leading contributors to the upturn.

Also, federal defense spending declined less in the first quarter than in the fourth quarter, and consumer spending on services, mainly for household utilities, picked up.

In contrast, business investment slowed, as investment in structures turned down and investment in equipment and software slowed. Imports declined less than in the fourth quarter.

Revisions to GDP
The 0.6 percentage point downward revision to GDP growth for the first quarter primarily reflected a downward revision to consumer spending on services. Exports and business investment were also revised down. These revisions were partly offset by a downward revision to imports. For more information, see the technical note.

Disposable income and personal saving rate
Real disposable personal income—personal income adjusted for taxes and inflation—fell 8.6 percent in the first quarter, in contrast to an 8.9 percent rise in the fourth quarter; dividend income and wages and salaries turned down significantly in the first quarter (reflecting accelerated payments in the fourth quarter). Personal saving as a percent of disposable personal income was 2.5 percent, compared with 5.3 percent in the fourth quarter.

Profits of nonfinancial corporations fell 0.5 percent at a quarterly rate in the first quarter, and profits of financial corporations fell 0.8 percent. Profits from the rest of the world fell 4.3 percent.